Saturday, January 24, 2015

Health Care Transformation – Numbers Speak Louder Than Words

When you measure what you speaking about, and express it in numbers, you know something about it.

Lord Kelvin (1824-1907), Popular Lectures and Addresses

What impact are ObamaCare and health exchanges having on the health industry?

United Healthcare – The Nation’s Largest Health Insurer

Well, with UnitedHealthcare, the economic impact has been salubrious.

Revenue from premiums rose 6% to $29.38 billion, while medical costs increased 4.1% to $23.43 billion.

The company served 88.5 million individuals across all of its businesses as of Dec. 31, up from 88.2 million a year ago.

It has enrolled more than 400,000 people through the health-law exchanges, and it expects its new sign-ups to be close to 500,000.

It has increased its presence in the marketplaces to 23 states this year and plans its "footprint” next year.

It has added 15,000 customers this year in its Medical Advantage plans.

its community and state business grew its Medicaid enrollment by one million people in the past year.

Fourth-quarter revenue rose 5% in its division that includes Medicare, and 29% in the segment with Medicaid.

CVS, The Nation’s Largest Pharmaceutical Chain

CVS Health supplies more than one of every five prescriptions in the U.S. and accounts for 1% of all corporate tax revenues.

According to CVS chief executive, Larry Merlo, the U.S. health system is undergoing a health care “retailization” aimed at reducing the cost of care while making its access more convenient.

About 100 million Americans are CVS customers each year.

It has 960 walk-in “minute clinics: staffed by nurse practitioners. The clinics are open on nights and weekends with no appointments. Their prices are posted and are 40% to 80% lower than traditional physician and a fraction of the costs of emergency rooms.

The overall costs in an internal study of its 200,000 workers who use the clinics are 8% lower than those who don’t.

It has stopped selling nicotine products in its stores, and it engaged in a campaign to raise adherence to prescription use by 15%.

All of these numbers indicate a focus on health. “ Our purpose, our goal, “ says Mr. Menlo, is to help on their path to better health.

Joseph Rago, a member of the WSJ editorial board, who interviewed Mr. Menlo, comments, “Mark it down as another way private innovation is finding ways to serve patients better despite, or because of, the policy mess in Washington.” (Joseph Rago, “The Revolution at the Corner Drugstore, “ WSJ, January 24-24, 2014)

Baa! Baa! Baa!American Health Care Sheep

We’re poor little lambs who’ve last our way, Baa!Baa! Baa!

We’re little black sheep who’ve gone astray, Baa-aa-aa!

Rudyard Kipling (1865-1936), Gentleman-Rankers

Why do Americans resist ObamaCare?

Not all of us do, of course. According to the latest polls, 40% approve of the ACA. Ten million will soon be in health exchange plans. You’re covered if you’re under 26 and under your parents’ plans. You can’t be excluded from health plans if you have a pre-existing illness. And if you’ve lost your economic way, and you’ve somehow gone astray, you’ll be protected by being provided with affordable health insurance.

So why resist federal beneficence?

It’s a long and tangled tale which I shall not recite again.

But basically, Americans don't like being treated like sheep. They don't have the sameness of sheep. They don't consider themselves as homogeneous parts of a common herd. They don’t like being thought of as black sheep gone astray. They don’t wish to be culled out of a herd by the IRS, when they choose not to have a health plan. They don’t enjoy being stripped of health benefits when they work more than 29 hours a week. They don't welcome electronc medical records announeing their health status to others, and their privacy being invaded.

They don’t appreciate having the wool pulled over their eyes when they lose their doctors and health plans after told otherwise. They resent higher premiums and deductibles when while being promised$2500 lower premiums per family. They bristle when treated called "stupid" before the law was passed.

They feel they are intelligent, self-sufficient, and capable of making their own decisions. They are not lambs who have lost their way, or who think only of sucking from the federal treasury, or who simply wag their tails in response to commands from their shepherd.

Some fear their shepherd may be a lion in disguise.

Friday, January 23, 2015

Health Reform Follies

Wooden-headeness, the source of self-deception, is a factor that plays a remarkably large role in government. It consists of assessing a situation in terms of preconceived fixed notions while ignoring or rejecting any contrary signs. It is acting according to wish while not allowing oneself to be deflected by facts.

Barbara Tuchman, The March of Folly (Alfred A. Knopf, 1984)

The Obama Administration has announced it has now has enrolled 7.1 million people in health exchanges. These people include the newly and automatically enrolled. The ACA is 80% of the way towards its goal of 9.1 million. By June, when the Supreme Court rules if people can enroll in federal exchanges, the administration expects to cover 10 million of the uninsured.

And so the march towards the high drama surrounding the Court’s decision grows and crystalises.

The Obama administration says it would be sheer folly to deprive 10 million people of health insurance and let them die on the streets, in their homes, or in institutions for the destitute.

To put in more elegant terms, “The outcome in King could determine whether millions of people continue to have access to affordable, comprehensive insurance.” ( “Predicting the Fallout from King v. Burwell – Exchanges and the ACA,” NEJM, January 8, 2014).

Or, as a medical school classmate friend of mine said when I predicted the Court would rule against the Administration, “You can’t be serious.”

This attitude reflects the pre-conceived wooden-headedness of government. Only government can care for the poor. Only government has compassion. Only government can level the economic playing field. For God’s sake , in the name of equity and social justice, doesn't everyone realize it is the duty of government to redistribute wealth and health.

This may be, but it ignores certain facts. Somewhere in the neighborhood of 55% to 60% of the American people, don’t trust government, resent losing their doctors and health plans, think the ACA ought to be repealed or fixed, voted against Obama policies in the midterms, are opposed to ObamaCare in over 95% of polls over the last five years, and believe additional entitlements contribute too much to our $18 trillion national debt.

So much for the ACA follies.

The GOP has its own set of follies.

How does it propose to deal with 10 million out there now covered and the 20 million more yet to be covered?

Surely some sort of safety net is needed. We are all human beings with human needs, and the poor will always be with us and will always need our help.

How would the GOP provide that safety net? Through Medicaid expansion? Tax credits for all? Tax loopholes for those who need loopholes to survive? Removing regulations, cutting taxes, slashing the corporate income tax, the highest in the world, and by so doing, lifting all economic boats and letting prosperity insure upward social mobility?

Can “growth,” “productivity,” and “innovation” plug the holes in the safety net? Or does it require government professionals, or the “philosopher- kings," like Obama, wwho are disciplined in the art of government?

We are about to find out. The approaching King v. Burwell ruling has all the ingredients, tensions, and conflicts of high drama.

Technology v. humanism? Your health v. your wallet? Government v. markets? Compassion v. rationing? Collectivism v. individualism? Control v. choice? Washington v. the states? Obama v. Congress? Compromise v. confrontation?

Can government take away what it has already given? That is the $1.5 trillion question, give or take a $ 1 trillion. What the hell, who cares, it's only tasxpayer mney.

Thursday, January 22, 2015

Low Cost, High Quality, Accessible Physician-Directed Health Care Delivery Models

The American health care industry is filled with opportunities to establish focused factories ranging from those that perform only one procedure, like cataract surgery, to those that provide the full panoply of care for a disease like cancer.

Regina Herzlinger, Market-Driven Health Care (Addison-Wesley Publishing, 1997)

The main problems facing health care and the reason for being of health reform are high costs, uneven quality, and limited access.

Is there any way of overcoming obstacles to good care in consumer-driven democracy other than government-mandated care?

Yes, said Regina Herzlinger, professor at Harvard Business School in her 1997 book Market-Driven Health Care.

Her answer was two-fold: value-hungry consumers and independent physician entrepreneurs satisfying that hunger.

The answer, she explained, resided in health-care “focused factories”, an off-putting term that appeared in a Harvard Business Review in 1974. The term meant focusing on a limited product, consumers, and efficiency throughout an entire organization.

In health care, a focused factory consists of groups of physicians working together to provide a clear, limited objective - the treatment of a specific health care problem or set of problems.

These problems might be surgical: cataracts, hernias, joint repairs, minor surgeries in ambulatory patients. They might be medical: diabetes, asthma, cancer, congestive heart failure.

Whatever the problem, the solution rests on these premises:

• Simplicity and repetition breeds competence.

• The treatment team is organized around patients’ every need and addresses every detail catering to that need.

Focused factories are proliferating around the U.S. They “focus” on the health care consumer. They are a factory in the sense they are efficient, safe, responsive, uniform, and fast in delivering a high quality product.

The “factories” often focus on a procedure, such as cataract surgery. They are comprehensive, anticipating and responding to the patients’ every need, being picked up and delivered to the factory, meticulously shepherding them through every aspect of the procedure, following up through patient phone calls and visits, and working hand-in-hand with the ophthalmologist-owners of the factory.

According to Herzlinger, “The driving force (behind focused factories) is a generation of consumers who are empowered, pragmatic, narcissistic and manipulative. They're the ones who have changed the rest of the economy and they're very interested in health care. There's no reason for any rational person to believe that they're going to say, ‘Oh no, leave health care in the hands of these people who are going to tell me what to do.’ Today's consumers simply won't accept that. The second driving force is technology, which has already vastly increased the quality and lowered the cost of health care.”

I believe there will be a third driving force: consumer-demands for direct, personal, accessible, cost-efficient health care without third-parties. Third party supervision, whether governmental or insurer administered, is costly, accounting for 40% to 50% of overhead in the typical physician’s office, and it is distracting, leading to 20% of physician time spend on paperwork rather than time with patients. These expenses and distractions have to end. One solution may be direct primary and surgical care, wherein costs are lower and care is more personal and immediate and known in advance.

Wednesday, January 21, 2015

Veto and Ego

Obama’s constant threats of a veto

Comes down to the height of his big ego.

He knows best what’s good for misguided U.S.

It’s what fits his ideology I guess.

What’s sauce for the goose is sauce fo the gander.

When you are the supreme commander,

you can take any executive action,

That fits your take on the Constitution.

State of Union Speech and Health Care

As I listened to President Obama’s State of Union address and read its 6500 word text, I thought of the World War II song, “Accentuate the Positive and Eliminate the Negative.”

The President did a good job with the positive.

“Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis. More of our kids are graduating than ever before; more of our people are insured than ever before; we are as free from the grip of foreign oil as we’ve been in almost 30 years.”

He eliminated the negatives from his speech: ISIS gains in Yemen, Syria, and Iraq; he and his party’s crushing defeat in the midterms; the daunting and likely prospect the Supreme Court may bring down ObamaCare;’s continuing troubles, health plan cancellations; or the high premiums and deductibles associated with the ACA, or the fact that he had nothing to do with the fracking revolution, which is making the U.S. energy independent, or the opposition of 68% of Americans who disagree with his opposition to the Keystone Pipeline.

He was big on the veto threat:

“We can’t put families at risk by taking away their health care, or unraveling new rules on Wall Street, or refighting past battles on immigration, And if a bill comes to my desk that do any of these things, it will earn my veto.”

In other words, on the big issues, it's my way or the highway.

Obama really didn’t say much about health care reform, probably because 58% of the public disapprove of it. He said health care inflation is at lowest rate in fifty years, without mentioning premiums, deductibles, and co-payments are at a record high for many in the middle class. He mentioned 10 million more Americans are insured, but neglected to say millions of middle class Americans have lost their health plans and doctors, and people on Medicare, Medicaid, and health exchange plans are having a tough time finding primary care doctors.

He ended his speech with a homily about being more cooperative with Republicans but added he would veto anything he disagreed with. He spoke of “good politics,” which translated, means, I will veto anything that contradicts or distracts from my liberal legacy.

All in all, his talk was an in-your-face, defiant, combative stab at the Republicans. It contained an ambitious agenda aimed at his Democratic base, with the hope of rallying the Middle Class to the Big Government cause.

The address was disconnected with reality since the GOP Congress is unlikely to pass his proposals. The text of the speech does not mention the employer or individual mandates or the frustrations associated with the IRS penalties and paperwork associated with ObamaCare.

His words were , however, a frank and long overdue acknowledgement of economic difficulties facing a shrinking Middle Class and the State of Disunion among Americans and their two major political parties.

Perhaps the President was right when he said, “The shadow of crisis has passed, and the State of the Union is strong.” I don't think so, but let us hope so. We shall see that the voters say in 2016, which was what this address was all about.